SMSF
What is superannuation?
A superannuation is an organizational pension program created by a company for the benefit of its employees. It is also referred to as a company pension plan. Funds deposited in a superannuation account will grow, typically without any tax implications, until retirement or withdrawal.
What is SMSF
Self-managed super funds (SMSFs) are a way of saving for your retirement. The difference between an SMSF and other types of funds is that the members of an SMSF are usually also the trustees. This means the members of the SMSF run it for their benefit and are responsible for complying with the super and tax laws.
Benefits of SMSF
Transparency
You would be able to know exactly where your money is being invested.
Offers Control and Flexibility
Maintain a control on the investment decisions.
Low fees
On most occasions, the cost of SMSF is usually less than that of a regular retail fund.
Borrowing ability
You can use your self-managed superannuation to borrow for investment purposes
Tax benefits
SMSFs benefit from concessional tax rates. In the accumulation phase, tax on investment income is capped at 15 per cent; in the pension phase there is no tax payable, not even capital gains tax
Strategy
Design your own strategy that suits you and your family’s interest.
Consolidate Super Assets
An SMSF allows a trustee to combine their super assets with up to three other members (such as partners or family members). Consolidating super accounts immediately creates a larger fund balance, which increases the fund's assets and investment opportunities – with only one set of fees.
Statistical facts
There is a huge gap between the amount of super most people have compared to how much will be required during retirement.
How much super should you have?
| Gender | Age | Average balance | Balance required today for comfortable retirement | Gap |
|---|---|---|---|---|
| Male | 30 | $27,182 | $54,000 | -$26,818 |
| 40 | $67,179 | $143,000 | -$75,821 | |
| 50 | $130,066 | $257,000 | -$126,934 | |
| 60 | $198,482 | $415,000 | -$216,518 | |
| Female | 30 | $22,850 | $54,000 | -$31,150 |
| 40 | $54,765 | $143,000 | -$88,235 | |
| 50 | $101,560 | $257,000 | -$155,440 | |
| 60 | $165,986 | $415,000 | -$249,014 |
Source: www.canstar.com.au – 1/02/2021. Average balances based on those reported in the APRA Annual Superannuation Bulletin (June 2020). Balance required today for comfortable retirement based on ASFA’s (The Association of Superannuation Funds of Australia) Super Balance Detective calculator for a person turning 30, 40, 50 or 60 in 2021. Gap calculated as the difference between the average balance and the current balance required for a comfortable retirement. Comfortable retirement assumes on ASFA’s Comfortable Standard balance of $545,000 (in today’s dollars) by age 67. ASFA assumes future pre-tax wage income of around $65,000 and than upon retirement the retiree draws down all their capital and receive a part Age Pension. Other assumptions include: Investment returns (nominal), before investment fees and taxes are 6.7%, investment fees are 0.7% of assets, the tax rate is 4.5%, administration fees are $100 per annum and insurance premiums are $100 per annum. The reported required balances are intended for illustrative purposes only.
Do not settle for your traditional super fund.
To learn more, please call us : 1300 455 662
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